FATCA

Foreign Account Tax Compliance Act (FATCA)

FATCA Background The Foreign Account Tax Compliance Act (FATCA) was enacted by the United States of America (U.S.) on March 18, 2010 as part of the U.S. Hiring Incentives to Restore Employment (HIRE) Act. FATCA is geared towards combating tax evasion by U.S. taxpayers holding assets in non-U.S. financial accounts/ institutions. FATCA requires Foreign Financial Institutions (FFIs) to report to the U.S. Internal Revenue Service (IRS) information on assets held by U.S. tax payers, or by foreign entities in which U.S. taxpayers hold substantial (greater than 10%) ownership interest. Where an FFI chooses not to comply with FATCA, the IRS will impose 30% withholding on payments to FFIs and on behalf of its customers. Entities Required to Report Non-U.S. financial institutions that accept deposits, hold financial assets